European shares pause after rally, doubts linger over Iran peace deal

July 1 (Reuters) – European shares slipped on Wednesday, pausing after a strong finish to the second quarter and amid caution over signs that peace talks between Iran ​and the United States hit a new stalemate.

The pan-European ‌STOXX 600 index slipped 0.3% to 639.64 points by 0710 GMT after logging its strongest quarter since October 2020 in the previous session.

The technology sector, which had been a key driver over the past three months, ‌was ​flat, with chip equipment maker ASML down ⁠1.1% and IQE and ⁠Infineon trading marginally lower.

Schneider Electric   lost 2.1% after the AI equipment maker said it had signed an agreement to acquire Cognite Holding, a privately held provider of AI software and ​industrial data for $3.1 billion in an all-cash deal.

Focus will be on the European Central Bank’s Sintra conference, where U.S. Federal ⁠Reserve chair Kevin Warsh and ECB ⁠President Christine Lagarde are expected to speak later ​in the day.

Traders anticipate both major central banks to lift interest ​rates by at least 25 basis points each later ‌this year, LSEG-compiled data showed. Oil prices have fallen back to pre-Iran war levels, however, concerns are that price pressures will linger for some time.

Among top movers, Primark owner Associated British ⁠Foods slipped 2.7% after saying it still expects annual profit to be below the prior year’s outcome, adding that the Middle East conflict ⁠impacted its European ‌profit outlook.

Swedish defence equipment maker Saab gained ⁠1.7% after signing a contract to deliver 16 ​Gripen ‌E fighter aircraft to Ukraine in a deal ​worth about ⁠24.6 billion Swedish crowns ($2.54 billion).

Elsewhere, Iran said it would not meet with top U.S. envoys who flew to the region following an outbreak of hostilities, clouding the prospects for a lasting peace between the two countries.

(Reporting by Johann M Cherian in Bengaluru; Editing ​by Rashmi Aich)